Insurance majors Zurich and Aon have launched a new clean hydrogen insurance programme, offering coverage for blue and green projects with CAPEX of up to $250m.
Designed to offer coverage for construction, delayed start-up, operational coverage, business interruption and more, the policies will include coverage for carbon capture, utilisation and storage (CCUS) technologies.
According to the firms, the facility has already been “oversubscribed…significantly exceeding expectations,” which they say shows market appetite for clean solutions and the insurance industry’s willingness to provide coverage for new risks.
The offer comes amid increasing unease surrounding the insurance industry’s capacity to provide cover for the growing number of green energy projects, while clean hydrogen project developers struggle to de-risk large-scale projects.
Joseph Peiser, Global CEO of Commercial Risk at Aon, said the new policy offer would cater to the unique needs of developers and capital providers that have found it challenging to de-risk projects.
“Insurance is a key enabler to facilitate the Net Zero transition, providing protection as well as risk expertise,” added Sierra Signorelli, CEO Commercial Insurance at Zurich.
The Hydrogen Council’s December 2023 Hydrogen Insights report found that just 7% of global hydrogen projects have passed final investment decision (FID), citing higher CAPEX, EPC and renewable power costs.
Read more: Hydrogen project pipeline grows to $570bn – just 7% have passed FID
Writing for H2 View, Arthur Delargy, Principal Risk Engineer at Liberty Specialty Markets, said, “…even so-called mature electrolyser technology may be considered as prototypical by the insurance industry, as it is deployed at scale and with variable renewable energy supply.”
He stressed the need for quality assurance and quality control (QA/QC) certification to reduce the likelihood of insurance claims.
Green hydrogen: electrolyser innovation ahead of consolidation
In my last article, I focused on the challenges that incumbent electrolyser original equipment manufacturers (OEMs) face in scaling up production capacity to meet the expected rapid increase in demand for green hydrogen in the coming decade. The focus was on alkaline electrolysers and PEM electrolysers, which are already commercialised. Existing electrolyser products have been designed for the demands of industries such as chlor-alkali manufacture. Large-scale green hydrogen production is a new scenario and requires new demands on the electrolyser, with the potential for significant technological innovation.
The pace of innovation in alkaline and PEM electrolysis has been rapid in recent years. Costs continue to fall, and efficiencies are rising. Stack architecture is undergoing a radical transformation, manufacturing methods are evolving, and electrode designs are migrating to lower-cost, earth-abundant materials…
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